More foreigners are getting involved in our stock exchange, what is it leading to?

by Tunji Andrews

FPI transactions at the nation’s bourse which recorded its lowest flows for the year in July increased significantly to N110.4 billion (about $0.71 billion) in August 2014, up 95.68% from July 2014.

Domestic investors conceded about 62.86% of trading to foreign investors as Domestic transactions decreased significantly from 74.83% to 18.57%, while FPI transactions increased from 25.17% to 81.43% over the same period.

Total transactions decreased by 25.49% from N181.97 billion in January to N135.58billion in August and foreign portfolio investors’ inflows accounted for 39.73% of total transactions while the outflows accounted for 41.70% of the total transactions in August 2014.

In comparison to the same period in 2013, total FPI increased by 55.76%, whilst the total domestic transactions decreased by 61.11%. FPI outflows outpaced inflows which was consistent with the same period in 2013. Overall, there was a 0.04% decrease in total transactions in comparison to the same period in 2013.

Total FPI transactions of N616bn which accounted for 14.8% of total transactions in 2007 consistently increased over the years to N1,042bn representing 50.8% of the total in 2013 (An increase of 36% over the 6 year period). Domestic transactions on the other hand started at N3,556bn representing 85.2% in 2007, but decreased significantly to N1,009bn representing 49.2% of total transactions in 2013 (A sharp decline of 36% in the 6 year period).

The FPI outflow includes sales transactions or liquidation of portfolio investments through the stock market, whilst the FPI inflow includes purchase transactions on the Nigerian Stock Exchange (Equities only). The information on the retail and institutional components of the report on the total domestic transactions in August was based on data obtained from about 95% of Active Dealing Members of The Exchange.

Comments (2)

  1. It is good thing as long as there a strong government oversight that is making sure that there is no illegal stock trading information sharing with the market.

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